Chief Executive of the Co-operative Bank Gideon Muriuki during a presentation on March 8, 2012. Photo/FILE
NATION MEDIA GROUP
Co-operative Bank CEO Gideon Muriuki has invested Sh155 million to increase his stake in the lender to an all-time high.
This even as other directors sold part of their shares amid a price rally.
Regulatory filings show that Mr Muriuki bought 10.3 million shares in the seven months to July at an average price of Sh15.
This has raised his stake in Co-op Bank from 1.85 per cent in December to 2.09 per cent, the highest level since the lender’s listing in 2008 when the CEO’s ownership stood at 1.95 per cent.
His stake is now valued at Sh1.4 billion.
LENDER CONFIDENCE
Mr Muriuki — the single largest investor in Co-op Bank — told the Nation.co.ke that the move is an affirmation of his confidence in the lender’s prospects.
“I bought a few shares (in the bank). Of course it shows my confidence in the business,” Mr Muriuki said, declining to comment further.
The bank’s directors, Julius Sitienei and Macloud Malonza, sold shares worth Sh3 million and Sh16.5 million respectively in the same period.
The sell-offs by the two have, however, had a little impact on their stake, which has stood at 0.1 per cent since listing.
The transactions come at a time when the bank’s share price has jumped 40 per cent over the past one year to trade at Sh16, providing an opportunity for the investors to make profit from capital gains.
NOT SELL
Mr
Muriuki’s share purchase mirrors the confidence expressed earlier this
year by the bank’s major shareholder Co-op Holdings Co-operative Society
that resolved not to sell its shares despite the expiry of its lock-in
period.
The investment vehicle, which owns 65 per cent of Co-op Bank, says its decision is based on the lender’s strong performance, which it expects to be maintained in the coming years.
The society, made up of a group of 3,800 individual co-operatives, was barred from selling its shares in the bank until this year following Co-op Bank’s listing at the NSE in 2008.
“Considering the excellent performance of the bank ... Co-op Holdings Co-operative Society has resolved not to dilute its shareholding in the bank in the foreseeable future,” the society said in a statement.
The institutional investor received Sh1.3 billion in dividends in the year ended December when it announced a dividend payout of Sh0.5 per share.
While Co-op Holdings has relied purely on dividends and bonus share issues, Mr Muriuki has in the past earned millions of shillings from selling part of his shares in the bank.
OVERTOOK BARCLAYS
Co-op
Bank has since listing allocated an additional 698.4 million shares to
its shareholders, representing a cumulative increment of about 0.2
shares for every one held.
Mr Muriuki bought most of the additional shares in the two months to June after the lender announced a record-breaking performance in the first quarter ended March.
Co-op Bank for the first time in history overtook Barclays and Standard Chartered in profit rankings, deepening the dominance of indigenous banks against the multinationals.
Results for the first quarter placed Co-op Bank’s net profit at Sh2.6 billion, beating Stanchart (Sh1.8 billion) and Barclays (Sh1.6 billion).
INTO SOUTH SUDAN
This
made Co-op Bank the third most profitable bank in the country behind
its home-grown peers KCB and Equity, whose net profits stood at Sh3
billion and Sh3.2 billion respectively.
In the half year ended June, Co-op Bank retained its position as the third most profitable lender with its net profit growing 17.1 per cent to Sh4.7 billion.
The bank has ventured into South Sudan, marking its debut in the regional banking model that was pioneered by Equity and KCB.
This article first appeared on Business Daily.
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